In India, we usually pay approximately 25 types of different taxes like Excise duty, Income tax, Value added tax, Service tax, Entertainment tax, Sales tax, etc. For e.g. If we go to the restaurant we have to pay Service tax, if we go to theatre to watch movie we have to pay Entertainment tax and if you are a salary person then you have to pay Income tax which is directly deducted from the payment. Similarly, we pay different types of taxes in different ways.
Sometimes, we have also have to pay tax on tax which is called Cascading Effect. GST will replace all these different types of taxes which are in different percent into 1 and there will be no need to pay different types of taxes.
GST (Goods and Services Tax) as the name suggests is a Single, Comprehensive Indirect Tax levy on manufacture, sale and consumption of goods and services at a National level. It is a tax on goods and services with value addition at each stage having comprehensive and continuous chain of set-of benefits from the producer’s/service provider’s point up to the retailer’s level where only the final consumer should bear the tax.
Nowadays, GST is becoming a reality that will unleash the growth potential and will bring transformation in the Indian economy. Once GST is live on 1st April 2017, it will ensure a smooth execution of businesses and simplify it in a way they are prepared for the roll out of the uniform indirect tax regime.
Now it’s time to prepare and get into the final phase of transition from VAT to GST regime across the country. We presume that the GST which will replace a myriad of consumption taxes and could be a “game-changer” over the medium term as it will reduce tax cascading and boost
India’s competitiveness, investment and job creation. ‘One Nation, One Taxation’ will be the new reality with GST subsuming over ten indirect taxes and making India a common market.
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